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Nanochip is busy setting itself up as a potential competitor to flash memory, with a promise of removable, durable memory chips that can hold hundreds of gigabytes of data each.

The Fremont, Calif. company’s silicon chips use microelectro-mechanical sytems (MEMS) to control the read/write heads on its chips, which will in turn modify phase-change media. The system offers high density and lower pricing than flash memory for chips.

First prototypes of 100 gigabyte chips are expected from the Nanochip late this year, with full production coming by 2010. The company says it will double storage capacity every year thereafter, which would give it terabyte chips within five more years.

An unnamed “world class” company led the $14 million financing, with participation from Intel Capital and JK&B Capital. Nanochip previously took $10 million, in 2006.

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